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Yudichak: Modernize over privatize

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ELLEN F. O'CONNELL/Staff Photographer
Mark Tanczos, right, president of the Malt Beverage Association of Pennsylvania, talks about the need to modernize and not privatize Pennsylvania's liquor system during a press conference Wednesday at Highland Beverage in Jim Thorpe. At left is state Sen. John Yudichak, D-14.

Privatization of Pennsylvania's liquor sales will put 15,000 people out of work, many of them small businessmen, a state senator said.

Modernization of the current system, not privatization, is what Pennsylvania needs, he said.

Sen. John Yudichak, D-14, traveled to Highland Beverage in Jim Thorpe on Wednesday to call attention to a part of the liquor privatization debate that he believes was ignored - beer distributors.

"Distributors have played by the state's archaic liquor laws for decades," Yudichak said. "Still, they've created thousands jobs across Pennsylvania, paid billions of dollars in local and state taxes, invested in our communities and kept alcohol safe and out of the hands of minors.

"For creating jobs, paying taxes and keeping our communities safe, what does the governor's liquor privatization plan offer Carbon County's 12 beer distributors and the 1,200 distributors in Pennsylvania? It offers them a chance to be driven out of business by big, out-of-state corporations that would become Pennsylvania's new liquor monopoly in Pennsylvania."

Yudichak said the state Senate Law and Justice committee has a hearing into the issue slated for Tuesday.

State Sen. Dave Argall, R-17, said there will be two other hearings into the issue, because there are "conflicting numbers."

"It is a complicated issue," Argall said. "We will do what is best for the Pennsylvania taxpayer."

Kevin Harley, the governor's press secretary, said House Bill 790 - which the governor supports - includes a provision to give beer distributors "first right" to sell wine and spirits now sold at state stores.

But Mark Tanczos, president of the Malt Beverage Distributors Association of Pennsylvania, said the beer distributors' inability to sell anything but a case of beer - while grocery stores can sell six-packs with mixed brands of beer - is unfair.

"Our numbers show us what we're going to lose in beer sales is not going to be made up in wine and liquor sales," Tanczoa said. "We're estimating losing close to 50 percent of our gross dollars with the expansion of beer licenses. One of the things we as the Malt Beverage Distributors Association believe in is that alcohol should be sold by specialized retailers. If we don't do it right, we lose our livelihood."

Tanczos said privatization will also hurt the microbrew industry.

"We have a great craft brewing industry in Pennsylvania," Tanczos said. "If we were able to sell smaller packages, it would only help the brewing industry."

Yudichak said ending the current system would kill the entrepreneurial spirit of microbrewers.

"They are going to go away," Yudichak said of microbrewers. "The retail giants will only use the top brands that move. It's their business model."

Harley said House Bill 790 also includes a provision to sell six-packs - and being able to mix the brands of beer in the six-pack - like some supermarkets do now.

Instead of House Bill 790, Yudichak said he has cosponsored bipartisan legislation written by state senators Charles McIlhinny, R-10, and Jim Furlo, D-38, that would modernize, not abolish, the current system.

"We can modernize the Pennsylvania liquor system, continue to generate revenue for the state budget, and continue to protect jobs and family-owned businesses," Yudichak said. "We can create a modern liquor system in Pennsylvania and meet consumer demand for better prices, selection and convenience with modernization. That will not be achieved by privatization, which will simply hand over the state monopoly in the liquor system to a corporate monopoly that will drive up price, drive out jobs and close family businesses."

Tom Highland, of Highland Beverage, fears losing what has taken he and his family 20 years to build.

"We put a lot of time and effort into the business, as well as helping community organizations," Highland said. "I would hate to see all of this thrown away, and give it to the big box chain stores. I would like to see modernization. I'd like to see us be able to sell six packs and maybe offer wine, with no increase in license fees. I don't see the big chain stores adding any employees. They already have many items, and would not have to add any employees."

Yudichak said the state store system puts $250 million into the state budget every year.

"They'll drive up costs," Yudichak said of big-box retailers. "Studies have exhibited that costs have gone up 5 percent and selection goes down. Small, family-owned businesses will be put out of business, and $250 million will be sucked out of the general fund budget. The liquor system in Pennsylvania is a net positive today."

jdino@standardspeaker.com

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